Tata Consumer Products Enters Premium D2C Coffee Market
Tata Consumer products Ltd (TCPL), that sells pulses, tea, coffee and spices, has launched a premium roasted and ground coffee under the Sonnets brand targeting urban and increasingly discerning coffee drinkers in India.
The move marks the company’s entry into the direct-to-consumer market as it tries to capitalize on new-age consumer trends where more shoppers are trying online first brands. Sonnets by Tata Coffee will be exclusively sold online, for now.
“We have been focusing on growing our business especially in beverages, that is, tea and coffee. As part of the focus on the coffee portfolio—which in India is largely instant filter coffee—the idea was how do we keep introducing innovations. Sonnets is a step in that direction, targeted at a more discerning consumer looking for freshly ground roasted coffee delivered to their doorstep," said Puneet Das, president, packaged beverages, India and South Asia, Tata Consumer Products Limited.
With the prolonged covid 19 lockdowns, consumers are seeking more coffee drinking occasions at home. This is especially true as cafes and coffee shops have remained off bounds during the pandemic. The company has also introduced a premium and gourmet tea brand—1868--earlier this year. 1868 by Tata Tea is a range of 13 teas—such as the Darjeeling Rare Wonder priced at Rs1,500 for 50 grams.
Sonnets is sourced from Tata Coffee’s plantations in South India. These are microlot coffees which are limited edition offerings and are processed on the estates. Sonnets is available in 4 microlots with customizations across roast and grind levels. Shoppers can place orders online and opt for either a filter coffee or a French press grind, the company said.
India’s in-home coffee market is largely made of instant coffee and filter coffee powder—with companies such as Nestle India, Hindustan Unilever Ltd., and Tata Consumer Products Ltd selling coffee here. The launch of Sonnets will pit TCPL against new-age coffee brands such as Dope Coffee Roasters, Blue Tokai and Araku, among others, that specialize in selling premium roasted and ground coffee. These brands have found favour among coffee connoisseurs in India.
The premium coffee market is pegged at Rs70 crore to 100 crore, said Das. He said the Indian market is currently undergoing an evolution when it comes to drinking coffee.
“As the market evolves, you start getting into artisanal coffees, people are experimenting more and want more customized experiences. The idea is to cater to them," he added.
The move helps the Rs. 7,154.36 crore company expand its portfolio especially as it tries to grab a bigger share of the packaged foods and beverages market in India.
Last year TCPL said it will acquire PepsiCo’s stake in NourishCo Beverages Limited—a 50:50 joint venture between the two companies as it moves to build a strong play in the packaged beverages market. Earlier this year, it announced the acquisition of Kottaram Agro Foods—the maker of Soulfull brand of breakfast cereals and millet-based snacks.
It already sells pulses, spices and ready-to-cook mixes under the Tata Sampann brand. The company also sells beverages under Tata Tea, Tetley, Eight O’Clock Coffee, Tata Coffee Grand brands in India and overseas. In a recent interview with Mint, the company’s managing director and chief executive Sunil D’Souza said the company’s "ambition is to become a large FMCG company"with immediate focus on food and beverages.
Sonnets will also be available on Amazon. However, Das said the move to offline retail could take time. "There's still huge headroom for us to grow in direct-t0-consumer (D2C) as we move forward before we decide to expand to any other channels," he said.